The government needs to do more to stem the yen’s rise to protect the nation’s export-driven economy as manufacturers increasingly shift production overseas, Sharp Corp.’s president said Friday.
Mikio Katayama said keeping all production in Japan is growing too risky, and it is moving some flat-panel TV production to China, with a plant in Nanjing set to be running by next year.
Speaking to reporters at a Tokyo hotel, Katayama expressed frustration over the surging yen, coming at a time when Sharp’s production of liquid crystal displays had been finally recovering from the battering it took a year earlier from the global recession.
The Bank of Japan intervened in currency markets Wednesday to prop up the dollar, its first intervention in six years following the yen’s climb to 15-year highs.
“It’s still not good,” Katayama said of the dollar recovering to ¥85 levels over the past two days. “Efforts must be kept up diligently.”
The yen has risen about 10 percent against the dollar this year, eroding the value of exporters’ overseas income when repatriated and making Japanese products less competitive abroad.
Katayama said prospects for Japanese companies are extremely negative with the strong yen while also facing competition from China, which tightly controls its currency.
Japan’s manufacturers are generally far more sophisticated than China’s, though Beijing is making a push for the country’s exporters to move into higher-value products. Sharp, based in Osaka, makes Aquos flat-panel TVs and small displays for Nintendo Co.’s upcoming 3DS hand-held machine with 3-D imagery.
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